Investing in Spain

[Jacob Gildea]

My brother and sister in law are Spanish and I was talking to them about investing in rental properties.  He is an architect and she is a lawyer.  She processes several foreclosures a month and he would be perfect at rehabbing properties.  The economy is still down in Spain so I think the time to buy is right.  My problem is that I don't know several things and I was hoping the BP community could help me out.  As background they live in Alicante, so long term rentals and vacation rentals would be an option.

1.  Is there a good site, similar to Zillow, in Spain that shows what real estate is selling for and what they are renting for?

2.  Are there any tax benefits in Spain like there are here in the United States?

3.  Are there any books or investment communities (like BP) that deal with investing in Spain?

Thanks for your help,

Jake

[Adrià Creixell]

The way that we do fix and flip in Spain is with a down payment contract called "Contrato de Arras". Normally it's a 10-20% downpayment and the conditions are as following: when you set "Contrato de Arras" is compulsory for the seller and the buyer to finish the transaction. In case that the contract is broken, the person that broke the deal should refund the money. If it's the seller, the one that broke the contract, should pay double.

For example: 100k for a property. Contrato de arras for 10k.

Seller: if finally he doesn't sell the property, he need refund 20k to the buyer.

Buyer: if finally he doesn't buy he losts the downpayment.

More information: https://www.easyoffer.es/blog/cuidado-con-el-contr...

How we use that kind of contract for Fix&Flip? On this contract you could set all the conditions that suits you. Normally, the conditions that I ever add to the contract are:

-Transaction deadline 6 months to one year (that means that you have one year to sell)

-If the contract is broken by the seller, he should pay the rehab costs.

-Even, you could negotiate, that he should pay mortgage expenses or other costs.

The best think of this kind of contract is that you don't pay property taxes or the transaction costs  because the property is not yours. Of course you pay VAT and revenue taxes from your company, but in front of the authorities you never owned this property.